What is Mediation?

THE ART OF REAL ESTATE MEDIATION

What Is Mediation?

In recent years, our society has seen a dramatic increase in litigation. Turning to the courts to resolve disputes seems to be an almost instinctive reaction. However, lawsuits can be financially and emotionally draining for the participants, and can even impact our economy over the long-run. While parties often resolve disputes on their own, many disputes sadly end up in lawsuits which are then subject to the expensive, time consuming procedures that drive parties to look for other dispute resolution alternatives.

Fortunately, there are alternatives to litigation for resolving disputes. Mediation is one such alternative that is growing rapidly in popularity–one that can dramatically reduce the time and cost (both emotional and financial) of resolving disputes. In fact, many real estate contracts now require the parties to mediate many disputes that might arise between them.

Mediation is a relatively informal form of dispute resolution that occurs outside of the court system. In mediation, the parties to the dispute are assisted by a neutral third person called a mediator. The mediator is not empowered to impose a decision on the parties but instead, the mediator facilitates discussions and helps parties reach a settlement to their dispute by opening lines of communication, objectively evaluating the case, identifying parties’ real needs and finding a solution to address those needs.

To understand how mediation is different from other dispute resolution processes, it is helpful to compare it against the various characteristics of the most common dispute resolution processes in use today.

Litigation

Litigation is an adversarial process whereby the parties submit evidence to a judge or jury and then rely on the judge or jury to make and impose a binding decision regarding the dispute. Litigation is governed by formal rules and procedures of court and generally is time consuming and expensive. Since it is adversarial, litigation is in effect a contest in which a winner and loser are selected.

Arbitration

Arbitration is similar to litigation in that it is an adversarial process whereby the parties submit evidence to a neutral third person (the arbitrator) who then renders a decision regarding the dispute. However, arbitration is usually private and not conducted in the surroundings, or under the formal rules and procedures, of courts. In order to compel another party to arbitrate a dispute, in most cases the parties must have previously entered into an agreement to arbitrate their disputes.

Mediation

Mediation is different from litigation and arbitration in many respects. Perhaps the most significant difference is that mediation is a non-adversarial process. That is, the parties do not argue their positions and give decision-making power to a third party. Instead, the mediator’s role is to assist the parties in achieving a mutually agreeable resolution of their dispute.

Small Claims Court

Small Claims Court is a formal court before a judge or commissioner where individual parties can turn to resolve their dispute as long as the dispute does not exceed $10,000. This Small Claims process is quick, cost effective, and timely.

While mediation is highly successful, in the event mediation does not resolve a dispute, the parties are free to pursue any other system of dispute resolution available to them. For example, if the parties entered into an arbitration agreement, they could pursue arbitration. In the absence of an arbitration agreement, the parties would likely have to resort to litigation.

It should be noted that even if mediation does not resolve the dispute, it is still an effective way of narrowing areas of dispute, allowing the parties to express their feelings, and enabling future proceedings to be more efficient and focused.